TowerJazz to acquire three Panasonic semiconductor plants
A new Joint Venture between the two firms will add a capacity of approximately 800,000 wafers per year (8 inch equivalent) in three manufacturing facilities in Japan
TowerJazz has signed a definitive agreement with Panasonic Corporation to create a joint venture (JV) to manufacture Panasonic's products.
Within the scope of the JV, Panasonic will transfer its semiconductor manufacturing process and capacity tools of 8 inch and 12 inch wafers at its Hokuriku factories (Uozu, Tonami and Arai) to the JV.
The closing of the transaction is expected to be by April 2014. Panasonic is committing to acquire its products from the JV for at least five years of volume production, and will transfer 51 percent of the shares of this JV to TowerJazz.
As a result of the JV, TowerJazz revenue is expected to increase by approximately $400 million a year and add substantial capacity for additional foundry business growth. This will enable a $900 million annual run rate opportunity starting Q2 2014, improving profitability.
The JV will add a capacity of approximately 800,000 wafers per year (8 inch equivalent) in the three manufacturing facilities in Japan.
It will also expand TowerJazz' offerings to include a state of the art 300mm analogue technology fab including best of class 65nm CMOS image sensor dark current and quantum efficiency performance and additional 45nm digital technology.
Following this transaction, TowerJazz will rationalise its Japanese business, which may include fab consolidations between TowerJazz's Nishiwaki facility and the JV's facilities. To this end, TowerJazz is evaluating potential ventures for the Nishiwaki facility.
The JV will continue the production of Panasonic's semiconductor processes as Panasonic's subcontractor as well as seek to expand operations by leveraging TowerJazz's customers and businesses to capture out-of-group sales.
The JV is expected to increase TowerJazz's technology offerings by providing multiple additional specialty flows, including Panasonic's specialty flows such as High Definition FSI - a world famous CIS (CMOS Image Sensor) benchmark technology for high quantum efficiency, low dark current CIS technology, and high voltage SOI (silicon on insulator) based power management technologies.
High Definition FSI is a unique technology that enables the use of front side illumination (FSI) even for small pixels, where usually, an expensive backside illumination (BSI) is being widely used in the industry.
It consists of light separation walls combined with a light pipe structure that funnels the light into the individual pixels with minimal light loss. HD FSI technology provides high sensitivity (high quantum efficiency) to light, low sensitivity to different angles of light that helps in preventing shading at the periphery of the image and excellent colour separation leading to true and vivid colours.
The dark current performance CIS technology is claimed to be one of the best in the industry, not only in the average very low values of dark currents even at elevated temperatures, but also with extremely small tail of high dark current pixels, known as 'bright pixels'. As a result, Panasonic technology allows excellent images at low light conditions (night) with no bright pixels in the image.
This technology is well suited for high end DSLR (digital single lens reflex) type cameras.
The production of High Voltage SOI technology from Panasonic immediately extends TowerJazz's BCD (Bipolar-CMOS-DMOS) offering from 80V to 190V enabling entry into new display driver, industrial and medical markets not previously accessible.
The technology includes a low Rds(on) integrated IGBT (insulated gate bipolar transistor) to enable efficient high - voltage drivers, 5V CMOS for integration of digital and analogue functions, SOI substrates for virtually perfect signal isolation, and thick copper layers for low-loss interconnects.
Amir Elstein, TowerJazz Chairman states,"This acquisition and the JV creation with Panasonic Corporation is just one of the culminating strategic events, that is enhancing TowerJazz's business leadership, and is intensively focused on creating shareholder value".
Russell Ellwanger, TowerJazz CEO, comments, "We are honoured to place our name side by side with Panasonic Corporation to create an innovative joint venture that provides high capacity, highest quality, multiple world leading analogue platforms and, as well, 300mm advanced technology nodes."
"This partnership brings together two leaders Panasonic, an acknowledged analogue components and systems leader analogue components and systems leader analogue components and systems leader, and TowerJazz, a recognised analogue foundry leader - to create a company that will serve and grow the analogue foundry space as no existing single foundry company can," continues Ellwanger.
As consideration for its 51 percent equity holding in the JV, after closing of this transaction, TowerJazz will issue to Panasonic ordinary shares in the value of approximately $8 million, to be calculated based on TowerJazz average shares value during March 2014.
As a result of holding its ordinary shares , Panasonic will become a minority stakeholder in TowerJazz .
The JV balance sheet assets will include, among others, the cap-ex tools of the three fabs, cash in the amount of approximately $40 million to be invested by Panasonic and work in process (inventories) manufactured at Panasonic fabs before the closing date.
Tower Jazz was represented on the transaction by Yigal Arnon & Co.and DLA Piper law firms.
TowerJazz is a global specialty foundry and manufactures integrated circuits, offering a broad range of customisable process technologies including: SiGe, BiCMOS, Mixed Signal/CMOS, RFCMOS, CMOS Image Sensor, Power Management (BCD), and MEMS capabilities.
